* Australian 2014/15 wheat crop seen around 25 mln tonnes
* Bumper Australian crop bearish for global prices
* Lack of rain, risk of dry El Nino on drought-hit east
* Biggest wheat state Western Australia expects planting
By Colin Packham
SYDNEY, Feb 28 Australia will issue its 2014/15
wheat production forecast next week, but with hot, dry weather
across its east coast and the threat of a dry El Nino weather
pattern developing, the supply picture from the world's second
largest exporter is uncertain.
The Australian Bureau of Agriculture, Resource Economics and
Sciences (ABARES) will publish its wheat forecast on Tuesday,
with analysts expecting an estimate of around 25 million tonnes,
which if realised would be the country's fifth largest crop.
A bumper Australian crop would add a bearish tone to prices.
Chicago Board of Trade wheat futures have fallen more than
5 percent in the last three sessions amid concerns that U.S.
wheat is are more expensive than rivals, denting export
However, analysts said that with much of Queensland and New
South Wales states recording near record low rain in the last
three months, conditions are less than ideal for east coast
farmers as they approach the start of the growing season in May.
"The financial incentives to plant are there for Australian
farmers ahead of the 2014/15 season," said Luke Mathews,
commodities strategist, Commonwealth Bank of Australia, who sees
production at around 25 million tonnes.
While global wheat prices hit multi-year lows, a record low
in Australian beef prices and weaker canola futures are
incentives for growers to maintain wheat acreage.
RISK OF EL NINO
The Australian Bureau of Meteorology says the outlook for
Queensland is for drier conditions in the next three months and
weather models show an increased chance of El Nino, which if
realised could see warmer, drier conditions across the east
coast, exacerbating drought conditions in Queensland.
An El Nino can have a devastating impact on Australian grain
production, with wheat production falling as low as two-thirds
from typical harvest seasons in strong El Nino years.
Australian farmers on the east coast could plant in May
without rains, but dry planting wheat is less than ideal. The
amount of rain the crop receives in September, a key time in the
growing season before end-of-year harvesting, is the biggest
factor in determining a crop's success.
Western Australia state, the largest wheat producing state
accounting for more than a third of national production, has a
much better weather outlook.
"Weather models are suggesting wetter than average
conditions for Western Australia but the outlook for the east
coast will depend on whether we get that weather break, which
they really need," said Mathews.
Many cattle farmers on the east coast have already been
bought to their knees by a two-year drought in the country's
prime beef producing state Queensland.
Without rain, grass growth in Queensland, home to half the
country's 28 million head, will remain stunted, and the dry
weather could also weigh on beef quality.
Drier conditions will lead to higher protein wheat
production, shrinking the amount of feed grade wheat available
to farmers, who have had to turn to grain to keep starving
(Reporting by Colin Packham; Editing by Michael Perry)